October 13, 2020
With so many moving parts, supply chains can be complex to manage and fragile to maintain. Introduce a pandemic or other systemic disruption, it can be difficult just to keep your own plant going. And how about your suppliers? Do you know if their plants are running without disruption and as safely as yours? Are they navigating these disruptive times as well as you are? And what about the sudden changes in people’s shopping habits? The stay-at-home restrictions have led people to hoard groceries, making the availability of everyday food scarce or even out-of-stock. How do you and your partners deal with all these disruptions?
The pandemic has exposed the vulnerabilities of many supply chains, and now is the time for manufacturers to re-think their strategies if they haven’t already. In a recent Infor-sponsored Food Processing webinar, I had the opportunity to discuss the benefits of improving supply chain transparency in modern food and beverage manufacturing. In the webinar we discussed:
- Meeting the increased demand from consumers for transparent food supply chains. Consumers care more about transparency than ever before, especially when it comes to their food. Manufacturers need to be able to collect, curate, and disseminate detailed product information to consumers—often down to the lot level. If a consumer wants to know what farm a specific chicken was raised on, the manufacturer should be able to answer that question. If you have a good story to tell, you should let consumers know. Transparency can help build consumer trust and thereby increase revenue.
- Transparency as a component of food quality and safety. Food safety, quality, and compliance are always top of mind for food and beverage manufactures. In the webinar we discussed two ways of handling food safety: the reactive and the proactive approach. Both require supply chain transparency, but while the reactive approach can do irreparable damage to brands and consumer health, the proactive approach uses strategies that reduce risk and implements these strategies into the business’ technology. Manufacturers can’t wait for a problem to arise before they implement a food safety or recall plan. At that point, it’s already too late—the response will likely be too slow and ineffective. Customers will be lost, reputations tarnished, and costs racked up.
- How transparency can help reduce food waste. In a world where up to 800 million people are chronically undernourished, roughly one-third of food produced for human consumption is lost or wasted across the entire supply chain every year. To minimize food waste, it’s important to understand not only why it occurs, but also where in the supply chain it occurs. In developing countries, food waste happens throughout the supply chain due to poor food handling skills, lack of proper training, and aging manufacturing equipment. In developed countries, however, consumers buy and cook more than they can eat, food is disposed of upon reaching its expiration date, and fresh food is left to waste due to lack of proper storage. Not only does the waste cause huge economic losses, it also has profound impacts on the environment. It is clear that food and beverage manufacturers have a great opportunity to improve supply chain processes and efficiencies to help reduce food waste.
In addition to the above points, we also touched on a few other technologies that can help improve supply chain transparency such as artificial intelligence and machine learning, which can analyze data to see where deficiencies in the supply chain occur.